Posted
by
Soulskillon Wednesday December 19, 2012 @04:56PM
from the better-late-than-never dept.

adeelarshad82 writes "A recently conducted analysis found that out of the top 50 most-funded Kickstarter projects, a whopping 84 percent missed their target delivery dates. As it turns out, only eight of them hit their deadline. Sixteen hadn't even shipped yet, while the remaining 26 projects left the warehouse months late. 'Why are so many crowdfunded projects blowing their deadlines? Over and over in our interviews, the same pattern emerged. A team of ambitious but inexperienced creators launched a project that they expected would attract a few hundred backers. It took off, raising vastly more money than they anticipated — and obliterating the original production plans and timeline.'"

Deadlines are fine.... but when scope and resources change, the deadline slips. That is simple project management 101.

I guess you've never worked at a real company where the management's bonuses are based on a shipping date they pulled out of thin air. So the project has to meet that date even if it means dropping features and shipping with bugs.

Why not? If dropping features means turning vapourware into reality version 1, then you get a crack at reality version 2 later on when you've ironed out your wrinkles. Priority 1 is always getting the product out of the door.

Now, I said its project management 101. I didn't say that managers listen to project managers, or that project managers always understand/are good at their jobs. I was just suggesting that, a SMART analysis would have to take these things into account.

I have however worked at rather unreal "companies" that ignored reality and pulled dates out of their asses. And.... their projects were never even close to on time. One of my own projects got delayed over 6 months because I raised the flag that production needed SSL certs on the authentication servers.

A year or so before that, I sat down in my managers office, looked at him and told him, flat out... my project was a year behind schedule when they hired me, its 6 months in, and I still can't get a single solid requirement out of anyone aside from vague statements about "people really want it".... he smiled, looked at me and said "I know, and we are all scared".

So basically, I worked for the people who pretended to be a real company, who picked deadlines out of their ass and then flogged people over them, but... who never actually let anyone go... so nobody really feared them....just disrespected them, were demoralized, and didn't want to work.... which didn't help the deadlines either.....

I have also worked with good project managers who pushed back on management, and really went to bat with management to make sure the plan and progress were understood and that we had real management buy-in.... smoothest and best projects I have EVER been on.... but she wasn't with me at that company.... that company had an entire group of dedicated project managers, all of whom would just roll their eyes if you suggested that a gantt chart was even worth making...well all except for the one who stayed for 6 months and left....

So basically, I worked for the people who pretended to be a real company, who picked deadlines out of their ass and then flogged people over them, but... who never actually let anyone go... so nobody really feared them....just disrespected them, were demoralized, and didn't want to work.... which didn't help the deadlines either.....

In my experience, that IS a real company. Pretty much every tech company I've worked for behaved this way.
It's way I tend to laugh at the whole 'the private sector can do it moah bettah!'

Lets say you did good and had everything planned for a production run of say, 250 units (probably a good crowdfunded estimate). Now you suddenly get people who order 1000 units total.

Problem is, production doesn't scale linearly - building 1000 takes a LOT more effort than building 250. First, your production method may work for 250, but fail for 1000 - if you planned on using a small contract manufacturer, they may not have the ability to deliver you 1000 units anymore - existing commitments may be the first 250 will be built as planned, but the excess depends on spare capacity. Depending on when you put it in, there may be none. So for example, if you have a Kickstarter that started in May and ends in June, get the money in July and start getting parts to build out August-September (assuming you can get the quantity required - again, your design may call for a special part available in small quantities, so 250 units, fine, 1000 units, well, Digikey has 700 in stock, the 300 have a 4 week lead time). Oh wait, your contract manufacturer can build in September, but October is fully booked for holiday production, so you can build 500 easily, but now you're stuck because your production line is at capacity.

So either you have to plan for it ahead of time by making sure you can line up the contract manufacturers if necessary (expensive), get the parts ahead of time (expensive), or let the schedule slip because well, building 1000 units is a lot harder than 250.

Perhaps it got popular and instead of building 250, suddenly you're saked to build 10,000. Now you've got a problem because at 250 units, Design for Manufacture isn't an issue. At 10,000, it really is because complex assemblies take time and cost more, and you may seriously have to consider making it in China, too.

Your first statement is untrue. You can limit the number of backers in each tier you set up. If you can only accommodate a production run of 250 units, you can set the pledge tier that includes the item as a reward to only allow 250 people to select it. Sure, that will limit your funding if you limit the tiers,but it fixes your hypothetical problem.

You also put the second batch at a lower cost by artificially inflating the price on the first batch to allow for unknowns. Because there always will be some; whether it's a production facility changing its prices on you, or a key team member getting in a car accident.

Problem is, production doesn't scale linearly - building 1000 takes a LOT more effort than building 250.

It's generally sublinear, until you hit production levels that start distorting the whole economy. What's happening here is the typical consequence of changing your original plan a lot, not some complexity that kicks in when you make more things.

That doesn't make any sense whatsoever. No production isn't generally linear: it is generally *sub*linear.

Making 1000 of something, generally costs LESS than 4 times the price of 250 of the thing, not *more* than 4 times.

It's true that making 10000 in an efficient will likely take longer than making 250 - because the more efficient production requires a longer and more complicated setup-phase, but there's no problem putting this in the kickstarter-description: "The first batch will be 250 items, if we get more backers, then we'll make additional batches as required..... "

Yes, it's sub-linear. However, if the original plans were for 250, and you get 1000, you need to retool stuff a LOT. Once you get into mass production (250 can be considered a small run that's easily handmade), the jump in costs is huge and beyond most people's abilities

Look at the Occulus guys - they originally planned on having the prototype developer hardware to be assembled with hot glue and duct tape. Well, that's fine for 250 units hand-assembled. Not so much with all the support they got, so now they have to invest a lot more money into moulds (easily $30K each) so it can be assembled in China (the original plan I believe was hand assembly by the team).

The problem is, ramping up is way beyond most people's abilities - it's trivial to make one-offs of something, even small runs, but once you get to larger runs a lot of work needs to be done.

250 can be done by a small team of people in the kickstarter over two or three weeks. To do 1000 this way is untenable - do it in 4 batches and you'll find the team burnt out by the 3rd batch.

So now you have to investigate contract manufacturers, have to do trial runs, costs of shipping, customs, etc. What you planned to complete in a few months suddenly takes a few months before production can get started, period. More if there are production problems (like a small tricky assembly gets done wrong, so it doesn't work and you have yields below 90%) because you didn't design for manufacture (again, something most people don't need to do for small runs).

Or, perhaps you planned on using a 3D printer to make parts, great for small runs, even contracted out. But this too can be problematic - Apple has seen this when they made an iPhone 4 part in a machine designed for prototyping, which resulted in Foxconn having to buy 20 of the machines to build enough parts. Probably more to accomodate breakdowns, since these machines aren't designed to run 24/7 continually.

And most people on KS do NOT have the skills, contacts, or ability to handle it when it blows up. It makes sense - some Joe comes up with something cool and gets a KS done to raise money to build it. But once it breaks beyond a "backyard hacking" style of manufacture to mass production, most folks are way beyond their league.

The other issue is that these projects went in with an expected level of funding and since we are talking about the most successful projects, they drastically exceeded their initial projects. How are these guys going to possibly meet their deadlines when they have to scale up DRASTICALLY.

Take for example, Relic Knights [kickstarter.com] they were funded at 4400% beyond what they initially asked for. I don't know many factories, more or less individuals, that can just scale up production 40 times what they expected. That t

One of the things I think it goes back to is the word "Inexperienced". Projects always seem easier in the planning phases than execution.

To be fair, TFS did say:

It took off, raising vastly more money than they anticipated — and obliterating the original production plans and timeline.

Even experienced planning can get blown away if your actual numbers are "vastly more" than your planned numbers.
Also does it take into account the number of times that real world stuff ships, and you never know about it?

Where have all the smart people gone? I've read several dozen posts and not one has pointed out that the problem of promising a scalar delivery date before determining subscription level can't possibly optimize over a metric of on-time delivery.

Kickstarter projects should be providing an estimated delivery date as a function of subscription level, where x1 (or less) is the number most projects now promote, but you also have numbers for x3, x10, x30, and x100. Out my ass, I'd guess you could fit a curve to existing Kickstarter data that would add six weeks to the deadline for each multiple of 3 in oversubscription level.

The Pebble project actually hit x100, so a realistic ship date in my mind might be 4x6=24 weeks later than the originally promised early fall delivery date.

The positive influence of having substantially greater funds to deploy (Pebble hired more people than originally planned) is wiped out and then some by the hugely increased risk level. If Pebble manufactures 85,000 watches, ships most of them out immediately, then discovers that 20% of the devices fail in under three months due to faulty moisture control or creeping solder whiskers, they might as well just blow the hole thing up.

Who is going to show up with $2,000,000 to bail them out of a huge PR fiasco?

One could say that the Pebble originally promised is late. Or one could say that the originally promised Pebble will never ship because it no longer exists. I tend to take the second view. The Pebble that ships 6 months downstream of the delivery date promoted during the funding cycle is not the same device. The manufacturing standards are higher, the QA standards are higher, additional features have been added (higher level BT standard, additional waterproofing), and the development environment should be further along (though I haven't seen any tangible evidence of this as yet).

The whole problem here begins with the phrase "The Pebble". "The Pebble" people thought they were buying/endorsing ceased to exist as the subscription level climbed toward the first $1,000,000 (the x10 subscription level). Pebble went deep into the regime of "a Pebble" from a spectrum of possible Pebble delivery scenarios.

The Pebble promoted was supposed to be manufactured in the S.F. region. The Pebble delivered will have been manufactured off shore in China. Until the subscription level was determined, we were truthfully talking about a Pebble modulo volume and risk. There's not even any point in totting up on-time delivery statistics without confronting the central fiction of the Kickstarter model.

When I signed up mid-snowball I viewed it as a quantum superposition of two entrepreneurial stories: A) a relatively low volume run with mid grade QA, immature tools, and a small target market; B) a high volume run with high volume QA standards, somewhat mature tools, and a moderately large target market for app developers.

The story was acceptable to me, either way. One watch, two stories. Kickstarter is not a single story engagement, even if the convention holds that only one of these stories is mentioned during project promotion.

A person has to be in some profound eigenstate of stupid, uniformed, myopic, deluded, distracted, self-serving, or litigious to fail to figure this out.

There's also a natural tendency for entrepreneurs to be massively optimistic by nature. Most people who are more realistic realize that their effort is most likely going to fail, and will be a lot harder than it seems to succeed. Those people don't bother to jump in and commit to making something new. I suspect 84% being late is probably about the right number for startup efforts in general. This is partly why VCs love to see a seasoned team of people who've built companies before, and why they like to

There's also a natural tendency for entrepreneurs to be massively optimistic by nature.

Perhaps there is also a natural tendency for funding sources to favor those who over-promise. You notice this study was of "the top 50 most-funded Kickstarter projects," so this may be as much a reflection of what gets funded as anything else. Especially since the whole point of kickstarter is to allow naive people to invest.

The issue with kickstarter becomes one of the relationship between the 'investor' (who isn't actually an investor) and the producer. When you invest in my company we have a business relationship, the scope of the project expands and you give me more money, well, the relationship has changed. With kickstarter... harder to say.

If you contract my company to do something, and I fail to deliver on time (or on budget or the like) there are legal contractual issues that can be fought over. With kickstarter... n

*ALL* projects have a high rate of blowing deadlines, that's what happens with complex stuff. Show me numbers that Kickstarter projects have a worse rate of being late than any other comparable projects out there, and then we can talk.

But here's the thing. The survey specifically focused on projects that exceeded their expected budgets, requiring them to work longer to fully utilize the money they received. I would be disappointed if a project that received twice the money as projected only did the same amount of work as projected.

But here's the thing. The survey specifically focused on projects that exceeded their expected budgets, requiring them to work longer to fully utilize the money they received. I would be disappointed if a project that received twice the money as projected only did the same amount of work as projected.

Why would you have to work longer? More money means more resources, time isn't the only resource.

Well, if it's a creative project, that means without a question more work into the design and execution process with some fraction of the number of workers that's inflexible. If it's a non-creative project and the number of people is variable, then there's still O(n^2) communication overhead. Sure, for some projects more money directly results in more product and the work is embarrassingly parallelizable (e.g. a production run of something that already exists), but any project that's predominantly product d

Well, I broke down and read TFA. The article implies through heavy use of anecdotal evidence that Kickstarter teams are inexperienced in product delivery, overly-optimistic about how long it will take to develop and refine the production process, and that's about it. Caveat emptor.

But here's the thing. The survey specifically focused on projects that exceeded their expected budgets....

Exactly.

The headline significantly mis-states the conclusions that can be drawn from the text. The headline says "Most Kickstarter Projects...", while the actual study only looked at "the top 50 most-funded Kickstarter projects".

I don't notice normal projects doing more than giving lip service to keeping customers, or consumers as most call them nowadays, happy. It seems everyone slips deadlines and cuts projected implementations and covers it with excuses of all types. I think this is what the normal projects excel at, telling lies to make up for amended expectations. In fact I believe that is the number one function of upper management.

hihi, haha, muahhaaaaaaa....upper management is not keeping the project in line, it is either managing the project and has the same problems as anybody, planing is HARD!Or they are busy covering their asses....

You're assuming that in order to be a business owner, you need to be good at business.

That's demonstrably untrue. For instance, many business owners got there because their dad (or granddad or great-granddad) were good at business, even if Junior is a complete idiot. Other business owners are people that got a big pile of wealth by other means and invested it in an existing business and were thus put in charge by virtue of their voting shares. Still others owe their position to successfully "failing upwards" i.e. getting promoted despite failing left and right.

First I plead guilty to the worst time estimating ever. I would probably guess wrong as to how long it will take me to make this post. I have had personal 2 week projects drag on for 6 months no problem. So if anyone has some great rules of thumb I would love to know. Years ago I met a CFO who had just finished grilling his tech guy for over an hour getting the tech guy to come up with a worst case scenario for the project they were about to begin. In that hour the tech guy nearly tripled his time and cost estimates. After he left the CFO doubled the time and cost estimate for the budget. In the end the CFO was nearly bang on.

I have taken a great PMI course and would recommend it to anyone in tech. Yet the PMI stuff was great if the project was fairly straightforward. But most tech projects, especially those found on kickstarter, are not really building projects so much as R&D which by its nature delves into the unknown. So scheduling the unknown is either going to be very fuzzy or lies. Since most people insist on a fixed date they are insisting on being lied to.

So I would be the last to cast stones and would doubt fraud until the fuzziness of R&D had been eliminated.

I once took part in a training exercise. About 10 of us in a room (all Aussies) were asked to estimate the distance from Melbourne to Perth. The fist thing that surprised me were the number of people who had absolute no idea, the second thing was the average of all guesses was pretty accurate. The fundamental mistake a lot of managers make is they don't ask enough people, often they don't even ask the person doing the work. If a boss tells (as opposed to asks) me how long it will take and it turns out to ta

Years ago I met a CFO who had just finished grilling his tech guy for over an hour getting the tech guy to come up with a worst case scenario for the project they were about to begin. In that hour the tech guy nearly tripled his time and cost estimates. After he left the CFO doubled the time and cost estimate for the budget. In the end the CFO was nearly bang on.

I would say this is a good CFO. The CFO understood that he had a choice: get it done quickly, or get it done right the first time; and he chose the latter.

This is why I love my job. Managers *hate* projects with fuzzy schedules and unknown resource requirements. On the other hand, geeks like me love creating new stuff. This creates a never ending tension. I'm lucky to be at a company that is willing to let me fail or miss a deadline along the way to creating something cool.

In that hour the tech guy nearly tripled his time and cost estimates. After he left the CFO doubled the time and cost estimate for the budget. In the end the CFO was nearly bang on.

Ten bucks says the tech guy was only estimating the time it would take to code. People are usually pretty good at estimating their own work, what they are not good at is estimating the bigger picture. This is not a failing, it's "by design", division of labour and all that. Also, the fool will underestimate to impress, the wise will overestimate for the same reason.

There were a lot of studies done in the early-mid 90's about IT projects, the common wisdom of the time was 3/4 of all commercial IT projects

Really its just a underestimation of required time to accomplish a project.And this is to be expected and further more, ther really is no simple solution for the moment you say to add 1/4 -1/3 more time to a project, this will be taken into consideration and it'll still be calculated wrong. It takes experience and disapline

Hardly. Very few projects on Kickstarter are solely dependent on funds raised there. What is demanded is that the funds raised, along with other funds they have, should be enough to make the project happen. Almost always, they will have to sell the product to non-backers afterwards to recoup their costs.

Volume production isn't the problem. Looking at the list of Kickstarter projects labelled "Where the *** is it?", many of them are games, or even just videos. Game and video "manufacturing" is trivial. There's no excuse for "BronyCon, the documentary" or the "Leisure Suit Larry" remake being far behind schedule. Not when each raised over half a million dollars.

It's mostly borrowed money until the project is complete, so they don't get a dime from me until I receive the goods. It should be an incentive to complete it on time, as I'm sure the interest rates on those loans can't be cheap.

Kickstarter is set up in a way that there's no incentive, at all, for anybody to do anything once they get the money. There's really not. Many times, I've considered creating a project that is an Open Source, Apple product related, DIY bullshit thing and just taking the money. Heck, I still might.

Kickstarter I believe, was either created by very naive, or very smart people who take advantage of the very naive people, or very stupid people.

Yeah yeah clever guy, I'm sure you could be a successful fraudster if you wanted to - although quite possibly, you'd fail to reach your target like most Kickstarter projects. I bet you and I both could steal credit cards too if we wanted to, it doesn't take much skill to be criminal jackasses.

Most Kickstarter projects deliver. A little late, most likely, but experienced backers count on that (and we also develop an idea about which projects are likely to be very late). It shouldn't happen with your economic

The header for this article says that "Sixteen haven't even shipped yet", without mentioning how late they are (I know plenty of the top 50 most funded Kickstarter projects aren't scheduled to ship this year, and one is even scheduled for 2014 as I recall). They're really trying to force the conclusion "OMG Kickstarter is such a scam!!1!!" down our throats.

So the study focused on the "most funded" Kickstarters, you know, the ones that planned to make 1,000 widgets and suddenly had to make 50,000. It should be no surprise at all if they failed to meet their original deadline, they probably had to change manufacturing facilities and potentially even the design of their product to handle that much capacity. Anybody can tell you that a change in the requirements for a project will affect the timeline. Maybe Kickstarter could be better about asking the develope

Most start-ups fail. Everyone has ideas but they're not all good. If you're helping out some online beggar on kickstarter then you're probably not giving much money and therefore not losing much. Live with it, that's how it goes. It could be worse, you could be dumping a few million into some tech start-up that goes no where.

I think the fact that kickstarter is more like free money than if you were to go to a traditional investor means that of course people are going to be more lax with what they do wit

Of getting way more money then they originally planned and having to expand the scope accordingly is not a missed deadline. You simply cannot call that a missed deadline, unless the developers specifically say that they will still hit the deadline well after it is obvious how much more money they have to spend developing the game.

Kickstarter is merely crowdsourced venture capital. The whole philosophy behind venture capital is high risk, high reward. Most investments fail but a few make enough profit to overcome the others' losses. Some time in the 2000s dot-com bubble, the VC expectations I heard were one in fourteen investments should average 20x growth (while 14x growth would roughly break even), though I don't know how many investments such a group would have going concurrently (more would permit more variance).

I think people have a different expectation of Kickstarter, because it is different than VC. While VC is high risk, high reward, Kickstarter is mostly high risk, low reward. The investors don't have visibility on the risk, so their expecations are set based on the reward.

Ask anyone into cars about "group buys" and they'll probably groan and tell you at least one horror story.
Kickstarter projects fail to deliver because there's no auditing, no consumer protection, nothing. If the whole thing folds, you're FUCKED.
Don't spend anything on kickstarter that you're not completely ok with never seeing again - and view any project, even the basic idea, with extreme skepticism.
Our free market system by and large works. If you've got an amazing idea, it should be easy to attract

This is not news. Only people who have never created would think that everything can be scheduled. The reality is things take longer and hurdles come up. That is part of the creative process of bringing products to market. If you want on-time-shipping then stick with stuff you can go to the store and pick off the shelf. Kickstarter is about innovation and creating new things. Dose of reality.

Is that only 32 percent of the projects failed (or at least haven't shipped yet,) versus around 2/3rds of the IT projects that corporations start. Maybe corporations should use the kickstarter model to fund their internal projects...

Don't forget that those have missed *publicly announced deadlines*. The companies behind them had plenty of time to plan and complete a couple of rounds internally before publicly announcing completion date.